Bermuda Chides EU For 'Tax Blacklist Questionnaire'

Bermuda said it will aggressively defend its reputation, noting ongoing work within the European Union to single out territories for placement on a "tax haven blacklist."

Bermuda's Minister of Finance, Bob Richards, said the territory had received an email from the EU's Code of Conduct Group with a questionnaire, to formulate which territories should be included on a proposed blacklist of tax havens by the end of 2017. The territory said the questionnaire seeks information on the way Bermuda conducts its business internationally.

The deadline for Bermuda's response is July 7, 2017, and failure to respond would lead to the island being deemed "non-compliant," the Government said.

Richards said the questionnaire had been designed to lead to a predetermined conclusion that Bermuda is a tax haven that is harmful to the global economy, and the EU in particular, and therefore should be placed on an economic blacklist.

He said the EU questionnaire is another example of the scapegoating of the island by high-tax, developed countries, who are "aided and abetted by certain members of the press to further domestic political objectives."

Richards also pointed out that an earlier attempt by the EU to blacklist Bermuda in 2015 failed after the Organisation for Economic Co-operation and Development and the Financial Action Task Force, which combats money laundering, concluded that Bermuda was not "harmful" in its conduct, or in the application of its laws in the global economy.

Richards said the first priority for Bermuda's Government is to answer the questionnaire clearly and logically by the due date. If there are biases in the questions, these will be pointed out and alternatives will be proposed that demonstrate Bermuda's commitment to cooperation, transparency, and reporting, he said.

"We will show and prove, once again, that our business model is beneficial to the world economy. Unfortunately, we will not be able to rely on support from our traditional friends in the United Kingdom, as Brexit has reduced their influence in Brussels considerably," he noted.

"Bermuda has spent a great deal of time and money adjusting our laws, regulations and business practices to stay ahead of, or on the leading edge of, the curve as it relates to international taxation and information sharing. We have been early adopters of all the initiatives coming out of agencies that set international standards. Yet there are those out there that choose, for their own reasons, to ignore our record."

"Bermuda does not hide beneficial ownership from tax, regulatory, or law enforcement entities; Bermuda does not create structures designed to obscure where income is earned; Bermuda is not the jurisdiction of choice for hundreds of thousands of multinationals seeking to create shell corporations – other jurisdictions are. But scapegoating Bermuda plays well in some European countries for political reasons. It also assumes that Bermuda is weak and defenseless."

"The Government will therefore aggressively defend Bermuda. We will do so with the support of our private sector partners and our overseas-based friends with whom we work."

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